No Work Comp? What Employers Need to Know!

As my readers are now aware from my article posted on August 19th – Work Comp: Porn Performers EEs vs. ICs, performers are indeed employees in the state of California for purposes of worker safety laws. California, as many other states do, requires that all employers within its borders secure workers’ compensation insurance coverage. However, what happens if an employer is uninsured for workers’ compensation in the state of California ?  California has rather harsh penalties for failure to secure workers’ compensation insurance, the California Labor Code reads in relevant part;

3700.5. (a) The failure to secure the payment of compensation as required by this article by one who knew, or because of his or her knowledge or experience should be reasonably expected to have known, of the obligation to secure the payment of compensation, is a misdemeanor punishable by imprisonment in the county jail for up to one year, or by a fine of up to double the amount of premium, as determined by the court, that would otherwise have been due to secure the payment of compensation during the time compensation was not secured, but not less than ten thousand dollars ($10,000), or by both that imprisonment and fine.

(b) A second or subsequent conviction shall be punished by imprisonment in the county jail for a period not to exceed one year, by a fine of triple the amount of premium, or by both that imprisonment and fine, as determined by the court, that would otherwise have been due to secure the payment of compensation during the time payment was not secured, but not less than fifty thousand dollars ($50,000).

In addition to possible imprisonment and fines, the state of California can issue penalties of up to one hundred thousands dollars ($100,000) against the employer in addition to the amounts listed above even for a first offense. The uninsured employer will also be subject to a stop order being levied against it by the Director of Industrial Relations. A stop order is basically an order/finding by the Director that such employer will immediately shut down and will not conduct any business utilizing employees until such time that the employer has secured workers’ compensation insurance and presents evidence of a policy to the Director. Also, the Director will issue an additional fine of one thousand five hundred dollars per employee not legally insured;

3722. (a) At the time the stop order is issued and served pursuant to Section 3710.1, the director shall also issue and serve a penalty assessment order requiring the uninsured employer to pay to the director, for deposit in the State Treasury to the credit of the Uninsured Employers Fund, the sum of one thousand five hundred dollars ($1,500) per employee employed at the time the order is issued and served, as an additional penalty for being uninsured at that time or issue and serve a penalty assessment order pursuant to subdivision (b).

(b) At any time that the director determines that an employer has been uninsured for a period in excess of one week during the calendar year preceding the determination, the director shall issue and serve a penalty assessment order requiring the uninsured employer to pay to the director, for deposit in the State Treasury to the credit of the Uninsured Employers Fund, the greater of (1) twice the amount the employer would have paid in workers’ compensation premiums during the period the employer was uninsured, determined according to subdivision (c), or (2) the sum of one thousand five hundred dollars ($1,500) per employee employed during the period the employer was uninsured. A penalty assessment issued and served by the director pursuant to this subdivision shall be in lieu of, and not in addition to, any other penalty issued and served by the director pursuant to subdivision (a).

I have seen the Director of Industrial Relations chain and paid lock businesses, not allowing entry until all insurance is secured and fines paid. This is not a situation that should be taken lightly. The state of California can be very aggressive in regards to prosecuting uninsured employers.

Beyond the regulatory scheme of imposing fines and possible incarceration, there are also possible negative effects in regards to a claim filed by an injured employee. In situations where an employer is insured for workers’ compensation, an injured employee’s ONLY remedy is to file a workers’ compensation claim. In instances of uninsured employers, an injured employee has several choices as to how to handle their claim for injury.

First, the injured employee may certainly still file a workers’ compensation claim with the Workers’ Compensation Appeals Board as they would do if the employer was insured. The injured employee may also file a civil lawsuit in addition to the workers’ compensation claim. Finally, if the employer does not defend and/or pay benefits on the workers’ compensation claim, the Uninsured Employer’s Benefits Trust Fund will step in and do so on the behalf of the employer. If the UEBTF does in fact provide benefits on the behalf of the employer to the injured employee, they will then seek ALL possible means of reimbursement from the employer, including pursuing civil actions and the filing of liens against property.

Furthemore, the employer simply filing for bankruptcy will not stop the UEBTF from pursuing their recovery actions directly against the owners of the uninsured employer. Any owner with at least a 15% share of ownership will be personally responsible to reimburse the UEBTF for all benefits paid the the injured employee. And the state can collect all of the benefits from just one owner. Be extremely careful of whom your partners are. The California Labor Code reads in relevant part;

3717. (a) A findings and award that is the subject of a demand on the Uninsured Employers Fund or an approved compromise and release or stipulated findings and award entered into by the director pursuant to subdivision (e) of Section 3715, or a decision and order of the rehabilitation unit of the Division of Workers’ Compensation, that has become final, shall constitute a liquidated claim for damages against an employer in the amount so ascertained and fixed by the appeals board, and the appeals board shall certify the same to the director who may institute a civil action against the employer in the name of the director, as administrator of the Uninsured Employers Fund, for the collection of the award, or may obtain a judgment against the employer pursuant to Section 5806. In the event that the appeals board finds that a corporation is the employer of an injured employee, and that the corporation has not secured the payment of compensation as required by this chapter, the following persons shall be jointly and severally liable with the corporation to the director in the action:

(1) All persons who are a parent, as defined in Section 175 of the Corporations Code, of the corporation. (2) All persons who are substantial shareholders, as defined in subdivision (b), of the corporation or its parent…

(b) As used in this section, “substantial shareholder” means a shareholder who owns at least 15 percent of the total value of all classes of stock, or, if no stock has been issued, who owns at least 15 percent of the beneficial interests in the corporation.

In conclusion, penalties, fines and incarceration are all possible ramifications for not securing workers’ compensation insurance. Furthermore, employers that do not have workers’ compensation insurance are also putting their personal finances at stake in the form of civil judgments and liens enforced, not by an injured employee, but rather by the state of California through the UEBTF. If you’re an employer in the state of California and do not have workers’ compensation insurance it is imperative that you immediately seek such coverage before either (a) a work related injury occurs and/or (b) the Department of Industrial Relations does a spot inspection and issues a work stoppage order.

Work Comp: Performers – EEs vs. ICs

The debate of performers being independent contractors or employees is an issue that comes up often in my practice. Whether it is an injured or infected performer, a director worried about his/her liability for an on-set injury or a studio owner asking my assistance in securing workers’ compensation coverage for his/her company, this is an issue that remains a hotly debated topic. Many in the industry still believe that for purposes of worker safety laws performers are independent contractors and not the employees of the producer paying them, directly or indirectly. This cannot be farther from the truth. Even during the open meetings with Cal-OSHA in June 2011 I heard numerous performers and directors declare themselves independent contractors during the public comments. Only to have Ms. Gold of Cal-OSHA flatly deny that issue.

Unfortunately or fortunately depending on what side of the debate you are on, a worker cannot simply declare themselves to be something. A worker’s status is dependent upon statutes and case law, not what the beliefs of the employer OR the employee happens to be. For this article to truly explain all the relevant statutes and case law surrounding the independent contractor vs employee debate would require hundreds of pages if not an entire book. Therefore, for the sake of brevity it is perhaps easier to select two California cases that are on point with this issue and illustrates for those reading this article that this issued is well settled.

Often porn performers compare themselves to both actors as well as stunt-people. The job of a porn performer can be said to be a blend of the acting and performing risky, albeit safe, stunts on set. Many inaccurately believe that stuntpeople and porn performers cannot be an employee under the traditional definition of such since they are only hired for the day or even a few hours. This is simply not true in California and in most states ( Note: It is possible though to be an employee for worker safety laws but an independent contractor for tax purposes).

Stuntpeople have been considered employees of the production company hiring them for at least 50 years in California. In Durae v. Industrial Accident Commission, 206 Cal.App.2d 691 (1962), the Second District Court of Appeals (this happens to be the court with jurisdiction over all of Los Angeles County) determined that a stuntman was indeed an employee for workers’ compensation purposes.

Petitioner is a motion picture and television actor. He was engaged to make a personal appearance at a rodeo in Pueblo, Colorado, in August 1960. His act was to include a demonstration to the audience of how motion picture and television shows were filmed. As a part of this demonstration, a man would ride a horse at a fast pace across the area, petitioner would fire a shot at the rider, and the rider would fall from the horse, taking what, among stuntmen, is commonly called a “saddle fall” to the ground.

 Originally, the Industrial Accident Commission (the precursor of today’s Workers’ Compensation Appeals Board) ruled against the injured employee, William Mansker, finding that he was indeed an independent contractor. Mansker appealed the decision and was granted benefits by the IAC. The employer, Donald Durae, then appealed the case to the California Court of Appeals where Mansker’s award of benefits was upheld and he was determined to be an employee and not an independent contractor. The court went on to state;

This finding is compatible with the findings affirmed by the Supreme Court in two cases somewhat comparable on their facts. In Drillon v. Industrial Acc. Com., 17 Cal.2d 346 [110 P.2d 64], one who hired a jockey to ride his horse in one race was held to be an employer on the basis that he had the right to control the manner in which the jockey rode the horse. In Schaller v. Industrial Acc. Com., supra, 11 Cal.2d 46, the petitioner made separate contracts with four trapeze aerialists that each would perform his specialty for a 20-week engagement. He then agreed to provide the four aerialists as an act in a traveling show. He was held to be an employer although he in no manner directed the act or the stunts of the individual aerialists.

It is clear from the holding in this case that stuntpeople have been considered employees of their contracting companies for at least the past fifty years. This ruling is consistent with the current state of California law. Stuntpeople remain employees in California, as do most workers.

Some porn performers may consider themselves more akin to actors then stuntpeople though. However, just as stuntpeople are considered employees of the production company so are actors, even those hired and paid through a talent agency. It is a misguided belief that, by a production company not paying the talent but rather the agent, they can avoid being held liable for a work related injury. It is also a misguided belief by large production companies that hiring directors or smaller sub-contracting production companies to actually produce the content will shield them from liability. In California, we have a law referred to as the general-special employer rule. Which basically states that if Company A hires a sub-contractor -> Company B, to perform services for them and Company B hires their own employees then Company A has a duty to insure that Company B has workers’ compensation insurance. If Company A fails to “pull” the workers’ compensation insurance information of Company B and an employee of Company B suffers an injury then Company A and their workers’ compensation carrier will be liable to provide coverage for that injury.

In Johnson v. Berkofsky-Barret Productions, Inc. (1989) 211 Cal. App. 3d 1067, an actor, hired for the day, suffered a shoulder injury while filming a television commercial for IBM. He attempted to claim that he WAS NOT an employee of the production company and rather an employee of his agent so he could file a lawsuit in civil court against the production company ( Note: The injured worker preferred to be an independent contractor so that he could sue under a civil tort theory and recover pain and suffering which is not possible to recover under a workers’ compensation claim ).

Johnson, an actor in television commercials, obtained acting jobs through a company called L’Image. Generally, L’Image directed Johnson to the shooting location of the commercial and advised him how to dress. The commercial production company then paid L’Image for Johnson’s acting services and L’Image, in turn, paid Johnson after deducting its percentage fee.

 Johnson, like many porn performers, was not paid directly by the production company but rather by his agent. The court then went on to discuss the employee vs. independent contractor distinction;

Labor Code section 3351 defines an employee as “every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, …”

An independent contractor is “any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished.” (Lab. Code, § 3353.)

[5] “The label placed by the parties on their relationship is not dispositive, and subterfuges are not countenanced. [Citations.] … [¶] …. [¶] … ‘[The] principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired. …’ [Citations.] [¶]

The court then analyzed the six factors to determine employment status under S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal. 3d 341 and determined that;

We therefore conclude, as a matter of law, Johnson was an employee of BBP at the time of the accident and therefore he is limited to workers’ [211 Cal. App. 3d 1074] compensation as his sole and exclusive remedy for damages resulting from personal injuries. (Lab. Code, § 3602.)

In conclusion, it is clear from Durae, Johnson and Borello, that the type of control that a production company has over a porn performer while on set (hence being “directed” by a “director”) will make them liable for workers’ compensation benefits due to an on-set injury. Further, a production company should want an injured performer to be an employee, otherwise that injured performer could sue the production company for damages resulting from pain and suffering. In the case of an on-set transmission of HIV those damages could result in millions of dollars being awarded to the infected performer. However, under workers compensation no such recovery is available. Workers’ compensation actually protects the studios more so then the performers, if a company does indeed have coverage.

In a future article I will discuss the ramifications for not having workers’ compensation insurance under California law.

Paying Talent on Time: What Talent, Producers and Agents Need to Know

One of the most confusing situations that confronts both talent and producers is when should talent be paid. Some producers are almost religious when it comes to “same day pay” while others place talent on payroll and may not pay for up to a month. Often, talent will contact my office with complaints of either not being paid timely and in rare occasions, when producer’s checks actually do not clear and “bounce.” This article will cover what talent, producers and agents have to be aware of in regards to when is payment due to talent. In California, there are serious penalties for failure to timely pay talent for work performed.

Special attention must be paid to the California Labor Code when discussing work related payments. According to the Labor Code section 207, employers must establish regular paydays and post notices of when such days are. For example, if your production company has office staff and or production staff that are paid on the 15th and 30th of each month, these days will be presumed to be your regular pay schedule. Even though performers may not be part of your usual payroll schedule the 15th and 30th may be deemed to be your required days for paying talent, if you do not pay talent the same day and instead pay talent through a payroll service. For example, if talent works for your production company on August 28th and your usual pay date is the 30th you may be required to pay talent on the same day as you pay the rest of your employees.

If you are a small producer and do not have a regular payroll schedule to pay other employees then you must look to California Labor Code section 204 as to when talent must be paid. For wages earned between the 1st and the 15th of the month you must pay talent for their work no later then the 26th day of the same month. If the wages are earned between the 16th and the 31st of the month, wages must be paid no later then 10th day of the following month. For instance if talent works for you on August 8, 2012 that talent must be paid no later then August 26, 2012. If the shoot occurred on August 30, 2012 then talent must be paid no later then September 10, 2012. However, “payroll” does not mean that a producer get two weeks to pay talent. It actually means that a producer utilizes a real payroll service and other employees are being paid on the same date and that the producer is paying payroll taxes on the talent’s earnings. Simply stated, a producer cannot pay talent two weeks late and simply write a check for the full amount of the scene without deducting and paying taxes.

This information may come as a surprise to some of those that are reading this article. What will be more shocking is what are the penalties imposed by not following these payment schedules or in case your check bounces even if you pay the same day.

Failure to timely pay wages is not a situation you want to find yourself in as a producer. The penalty for such is that the talent’s right to payment at their rate continues for up to 30 days. Allow me to rephrase that, a producer will be required to pay the talent everyday for up 30 days as a penalty. For example, if talent performed for you on August 30, 2012, wages would have to be paid by September 10, 2012. If you did not pay talent by that date, that talent would be entitled to a penalty of whatever their rate was for the shoot (for example $1000) for each day payment was made late. Under Labor Code section 203 and 203.1 (in case of a check that does not clear) if you did not pay talent until September 30th you can be hit with a $20,000.00 penalty by the California Labor Commissioner for paying 20 days late. The penalty is $1000.00 per day (or whatever the talent rate is for that shoot) for up to and including the 30th day. Obviously, this is an extreme and severe penalty but one is that is often imposed and maintained by the Labor Commissioner. Even if you agree to settle with talent for less then the full penalty you will have to agree to send all payments to the Labor Commissioner’s Office who in turn will send it to the performer. Meaning there is no getting out of the this situation.

Further, it should be noted that nothing in the Labor Code has anything to do with whether a model release was signed nor can the Labor Code be contravened through a written agreement with talent. Simply put a producer cannot add a clause to a model release agreement indicating that they have up to six months to pay wages. Lastly, in addition to what is awarded to talent by the Labor Commissioner for unpaid wages, penalties and interest, the attorney representing talent will also be entitled to attorney’s fees.

Special attention should be paid by agents to this situation as well. It is often practice and custom within the adult industry for the agents to ask producers to pay them directly and then in turn the agent pays the talent. By doing this, the agent may unwittingly make themselves the employer in this matter and be subject to the same penalties for failure to pay talent timely. In California, there is a general legal conclusion that employment follows wages, which means if you pay the wages you may deemed to be the employer. Or in the alternative, if you are a producer and you pay the agent instead of the talent directly you may be in violation of the Labor Code if the Labor Commissioner determines you should have paid talent directly and did not and the agent failed to pay talent timely.

In conclusion, the payment of wages to talent is still a relatively untested area of law in the adult industry that is rife with potential pitfalls for the unwary and uninformed producer and agent. It is strongly recommended that you review your wage payment policies with a lawyer that is well versed in employment law and the Labor Code.

UPDATE:

I wanted to also add in some relevant case law and a brief synopsis of such so anyone reading this can realize how it applies directly to the adult industry.

In Smith v. L’Oreal USA, Inc. (2006) 39 Cal. 4th 77, the California Supreme Court ruled directly on this issue. Ms. Amanda Smith worked for L’Oreal as a “hair model” at an upcoming L’Oreal hair show. L’Oreal agreed to pay her $500 for one day’s work at the show. Ms. Smith worked at the show, where her hair was colored and styled, and she then walked a runway a few times. Ms. Smith stayed at the show until she was told she could leave. L’Oreal did not immediately pay her the $ 500 in wages it owed her, but waited over two months to do so.

Ms. Smith filed a law suit against L’Oreal, alleging that she worked for one day, that her employment was terminated at the end of the day, that L’Oreal violated its obligation to pay earned wages promptly upon separation, and that it should pay her “waiting time” penalties under Labor Code Section 203.

The California Supreme Court agreed. The Court held that the discharge element of Section 201 can be satisfied either when an employee is involuntarily terminated from an ongoing employment relationship or when an employee is released after completing the specific job assignment or time duration for which the employee was hired. An employee who works on a job assignment of short duration is not excluded from the protective scope of Sections 201 and 203.

If a production company does not pay your talent at the end of the shoot this could result in huge penalties being assessed against that employer. This would also apply to any temporary employees, including but not limited to directors, camera people, lighting or production assistants.

 

 

The Condoms are Coming

http://www.xbiz.com/articles/137838/fattorosi

With words similar to those, Paul Revere ushered in a revolution that transformed the face of a nation. Similarly, on June 7, Cal/OSHA changed the shape of this industry’s future which might ultimately lead to a revolution in adult entertainment. I was able to attend the meeting and even tweeted the discussions from the meeting live via my Twitter account. As it has been reported, the turnout was strong with numerous industry people in attendance representing all aspects of the industry.

What was quite clear from the meeting was the absolute distrust the industry has for those on the Cal/OSHA Board that have drafted the proposed regulations. There were statements made during the meeting that Cal/OSHA was attempting to regulate the industry out of existence for moralistic and religious reasons or perhaps that the AIDS Healthcare Foundation, the Pink Cross Foundation and Cal/OSHA were in some way working together to drive the industry out of California.

I can certainly understand how many in the industry may feel this to be true, from my experience dealing with Cal/OSHA and state safety regulations, that is simply not the case. Cal/OSHA is attempting to bring this industry in line with numerous other industries that are regulated in regards to employee safety. Cal/OSHA actually feels that the proposed regulations are less intrusive and harsh than the current regulations. While the new regulations proposed by Cal/OSHA are yet to become law and may not for another year, it was clear from their meeting that condoms and other barrier protection methods are now required and are currently the law in porn.

Under the proposed regulations, barrier protection and condoms may not have to be utilized for oral sex scenes when certain requirements are met by the producers and talent. However, other than that one issue, barrier protection and exposure issues will change how adult entertainment is produced and consumed.

Unfortunately due to the heated nature of the meeting, not all issues could be covered and there are still numerous discussions that are necessary as to the most basic issues such as how to dispose of the used barriers, how to handle clothing used on set, record keeping requirements and employee training issues. This article will focus on the proposed regulations and want it means to producers and talent.

INDEPENDENT CONTRACTORS OR EMPLOYEES ?

One of the first issues to be raised during the meeting was that the proposed regulations only apply to employees and not independent contractors. Numerous performers and producers spoke up and attempted to declare themselves independent contractors and thus not bound by the regulations. Cal/OSHA did not directly address the IC vs. EE issue and merely referred the audience to the California Labor Code and existing case law.

Rest assured that for purposes of the proposed regulations, performers are indeed employees, even if only for a day, of the hiring studio. However, under the tax code, many of those same performers may actually be independent contractors. There are two different legal tests to determine employee status under the California Labor Code and the U.S. Tax Code. According to the Department of Industrial Relations of the state of California, the California Supreme Court has adopted the “economic realities test” as noted in S. G. Borello & Sons, Inc. vs. Dept. of Industrial Relations (1989) 48 Cal.3d 341. The economic realities test sets forth several factors for determining whether someone is an independent contractor or employee:

    • Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
    • Whether or not the work is a part of the regular business of the principal or alleged employer;
    • Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
    • The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers;
    • Whether the service rendered requires a special skill;
    • The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
    • The alleged employee’s opportunity for profit or loss depending on his or her managerial skill;
    • The length of time for which the services are to be performed;
    • The degree of permanence of the working relationship;
    • The method of payment, whether by time or by the job; and,
    • Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.

Even where there is an absence of control over work details, an employer-employee relationship will be found if (1) the principal retains pervasive control over the operation as a whole, (2) the worker’s duties are an integral part of the operation, and (3) the nature of the work makes detailed control unnecessary. (Yellow Cab Cooperative vs. Workers Compensation Appeals Board (1991) 226 Cal.App.3d 1288).

There is little doubt that a performer would be determined to be an employee under the above noted tests. Several studios have already been fined by Cal/OSHA and to this author’s knowledge none have been overturned on appeal. Most recently, Hustler Video was fined over $14,000 by Cal/OSHA for the lack of barrier protection on set, lack of a blood borne pathogen plan as well as other infractions. According to an article on XBIZ.com on April, 5, 2011, Hustler plans on appealing its fine. However, there has been no recent news as to that particular case.

The only potential exception this author can see to the regulations is when performers coproduce a scene and trade content with each other. As long as there is no monetary compensation offered as payment for services, then more than likely, Cal/OSHA would not determine that a content trade situation to be employment.

Getting past the IC vs. EE argument, what does this mean for the industry and how will the proposed regulations effect content production in California on a daily basis?

Condoms for blow-jobs? First, the proposed regulations require condoms and/or barrier protection (dental dams) for all sex scenes where there is a possibility of an exposure by a performer to the bodily fluids of another performer. The only exception to this has been carved out for mainstream studios in so much that saliva has not been classified as a bodily fluid. The reason for this exception is probably apparent to everyone except Cal/OSHA.

The only exception to the condom/barrier rule is for oral sex scenes and only when both performers have a clean DNA PCR HIV test as well as clean gonorrhea and chlamydia test results within 14 days of the scene and have both been completely vaccinated for Hepatitis B and HPV.

It should be noted that the proposed regulations call for urine testing as well as throat and anal swabbing for gonorrhea and chlamydia for both male and female performers. It should also be noted that it takes a series of three injections over the course of six months for someone to be fully vaccinated for hepatitis B. Therefore, all performers should immediately seek hepatitis B vaccinations so as to insure they can continue to work once the proposed regulations actually take effect.

If a performer is not properly vaccinated or does not have a clean test, then condoms/barrier protection must be used at all times.

No more facials? The next question is — what about the money shot? According to the proposed regulations ejaculate cannot be placed into any orifice and or on any non-intact skin. In layman’s terms, cream pies, facials and/or swallowing will no longer be allowed. Ejaculate can only make contact with intact unbroken skin found on a performer’s breasts/chest, back, legs and feet. Obviously, any producer is still free to use non-harmful fake ejaculate to simulate real cum or squirting.

If for some reason, real human ejaculate or bodily fluids other than saliva does find its way onto broken skin and or an orifice — that would be considered an “exposure” and immediate medical attention must be provided and documented by the employer. Further, the employer must provide post exposure testing and all results recorded in accordance with Title 8 of the California Code of Regulations Division 1, Chapter 7.

Now that AIM is gone what’s next? So who’s going to be paying for all this testing, vaccinations, record keeping and medical treatment because of wayward money shots? According to the proposed regulations, all medical testing fees, treatment and record keeping requirements must be paid for by the producers and studios. Which producer, well that answer wasn’t so clear according to Cal/OSHA.

Basically, Cal/OSHA’s position is that the employers (studios and producers) can ban together to create cooperatives to negotiate with medical care providers and testing centers to bargain for the best price and therefore it will even out over the long run. Cal/OSHA assumes that all producers and studios will be “piggybacking” off each other’s tests. Further, these new additional costs cannot be passed on to the performers or talent agents. It is solely the responsibility of the employer to pay for these costs. On the bright side for the studios and producers, they will now be able to dictate exactly where talent will receive their testing from.

The condom police? So how is Cal/OSHA going to enforce these new regulations once they go into effect? Are they going to be sending Cal/OSHA’s cops in lab coats and environmentally friendly smart cars in droves to Porn Valley to peak in on everyone? The answer might be yes.

According to Cal/OSHA, enforcement will occur in two ways. The first and most obvious is because of an employee (performer) calling into Cal/OSHA’s offices and reporting a violation of the regulations. This alert will mandate an investigation by their offices. They literally have no choice and must open an investigation and look into the performer’s complaint. Thus, that is the easiest and quickest way to get Cal/OSHA knocking on your door. Be aware that a complaint by a performer can be made anonymously as well.

The second is what the Cal/OSHA Board referred to as a sweep. It is possible that they will send out a contingent of inspectors on a regular basis to do spot checks on studios and producers. At least the ones they can locate. In my previous experience I have seen Cal/OSHA perform “sweeps” on rare occasion and do not think that will be a likely occurrence. However, it may occur once the proposed regulations take effect just as a gentle reminder that compliance is mandatory.

You may be asking how can Cal/OSHA determine the difference between a disgruntled performer from a competitor or even a group such as AIDS Healthcare Foundation making an anonymous report. I don’t know how they can but Amy Martin from Cal/OSHA did indicate that they have been dealing with this very issue with other industries and have developed the ability to determine the difference. It should be noted that only a complaint from an actual performer mandates an investigation. All other complaints do not require an investigation and Cal/OSHA has the discretion to take no action on a report of a violation.

Vegas baby, Vegas! Finally, one last point that has been overlooked by other writers, is there a threat of federal regulation. Cal/OSHA made it very clear that before their proposed regulations can go into effect they must first be approved by the federal OSHA. Which means that, once approved by federal OSHA, these same regulations can be adopted by any other state. In essence, the discussions and the debate, the industry is currently having are extremely important since we may not get another chance to debate these issues.

It is this author’s opinion that once approved and adopted in California, these regulations will eventually be adopted and approved by other states. I would not be surprised to see a push for states such as Nevada, Florida and Arizona to pass similar legislation.

Viva la revolucion! The proposed regulations are over 17 pages long and are quite involved. I have only been able to touch briefly on some of the more important aspects of the proposed regulations. I strongly suggest that everyone read and digest the regulations and try to understand what they will mean to the future of not only California adult entertainment but in general the industry in the U.S.

Will these regulations cause the industry to pack it’s collective bags and find greener pastures elsewhere? Will it cause it to revert back to the pre-Freeman underground days of lore or will it simply cause the studios to treat the performers better and adopt the practices outlined? At this point, no one knows. Whichever it may be, certainly there is a revolution afoot.

Porn, Privacy, HIPAA – Redux

http://www.xbiz.com/articles/124370/fattorosi

In February, the AIDS Healthcare Foundation took their fight against AIM and the adult industry to the authorities of the federal Office for Civil Rights, a federal agency under the U.S. Department of Health and Human Services that enforces HIPAA, the California Office of Health Information Integrity enforcement Unit and Los Angeles County’s Health Facilities Inspection Division.

Rhett Pardon, of XBIZ, quoting AHF’s letter stated, “The authorization is essentially a waiver of privacy rights that is against public policy,” the letter said, citing Civil Code § 56.37. “Disclosures of testing results pursuant to such an invalid authorization would therefore appear to breach the actors’ privacy rights.”

The U.S. Department of Health and Human Services will now investigate whether AIM has violated California Civil Code § 56.37 as well as federal law. Jeffery Douglas, attorney for AIM, has stated that AIM’s HIPAA release has been vetted by experts in the privacy law and HIPAA and that AIM stands behind its release.

So what happens now and what does this mean to the industry and more specifically to performers and producers of adult content? If the investigation concludes that AIM’s release is too broad, their release may have to be rewritten, limiting who, how and for how long testing results may be disclosed. This may change how the industry handles the issue of testing between producers and performers. Access to testing results by producers may have to be blocked with only performers showing each other test results prior to shooting.

Performers themselves could share testing results with the producers though. There is no restriction on an individual’s rights to share their medical history or test results with whomever they wish.

Obviously, this issue will continue to evolve and everyone must stay informed as to how HIPAA may change how the industry does business. Cal/OSHA will be holding hearings later this month (June 29, 2010) as to the use of condoms on adult sets.

The original article “Porn, Privacy and HIPAA” was published in the summer of 2009 in XBIZ directly after the last HIV outbreak in the industry, however the issues covered in it remain relevant. The following are excerpts from that article.

Within HIPAA are confidentiality provisions of the Patient Safety Rule that prevent, in certain circumstances, the public disclosure of private healthcare information of a patient by a medical provider, health plan and health care clearing houses.

However, HIPAA does not apply to employers. The Privacy Rule does not prevent your employer from asking you information about your health if your employer needs the information to administer sick leave, workers’ compensation, wellness programs, or health insurance. However, if your employer asks your health care provider directly for information about you, your provider cannot disclose the information in response without your authorization.

It should be noted that if your private medical information is disclosed by a medical provider, that medical provider or their employee may face civil as well as criminal liability. A Los Angeles woman was indicted under the federal HIPAA privacy law for accessing the private medical records of celebrity patients at UCLA Medical Center and selling information obtained from those files to a national media outlet. The celebrities whose records were breached reportedly included actress Farrah Fawcett, singer Britney Spears and California first lady Maria Shriver.

The Privacy Rule allows medical providers, such as AIM, to disclose protected health information, without authorization, to a public health agency that are legally authorized to receive such reports for the purpose of preventing or controlling disease, injury, or disability. In this case, the Los Angeles County Public Health Department would be such an agency. Generally, medical providers are required to limit the protected health information disclosed for public health purposes to the minimum amount necessary to accomplish the public health purpose. Unfortunately, HIPAA prevents the public disclosure of those that are infected or who may have been exposed.

However, individual performers that might be afraid that they were exposed could still inquire into the identity of those exposed to determine if they if fact were. Private disclosure in the interest of public health may be allowable. Under the Privacy Rule, a medical provider may disclose protected health information to a person who is at risk of contracting or spreading a disease or condition if other law authorizes the covered entity to notify such individuals as necessary to carry out public health interventions or investigations. For example, a covered health care provider may disclose protected health information as needed to notify a person that (s)he has been exposed to a communicable disease if the covered entity is legally authorized to do so to prevent or control the spread of the disease.

However, performers must be careful about sharing what information they may learn. An infected performer that is “outted” by another individual can file a lawsuit under the common law theory of public disclosure of private facts. If a false report is made as to a performer’s HIV positive status, that performer may have a claim for false light. This is were the plaintiff is placed into a false light in the eyes of the public that may damage their career and cause emotional distress. Obviously, if someone mis-reports that a performer is HIV positive or even exposed to HIV that can cause great distress as well as the lost of a career. Damages for both public disclosure and false light could be extensive.

Overall, in an adult industry that lays its self open to all that consume its product, there is still a need for privacy within the industry.

Wages and Hours: Paying Overtime Correctly

http://www.xbiz.com/articles/109457/fattorosi

With the downturn in the economy, companies are often finding themselves laying off workers in order to save money and meet expenses. As I discussed in a previous article it is often necessary to let a portion of a company’s workforce go in order to cut overhead. With a reduction in force often overtime is necessary. In order to stay within federal as well as state employment guidelines, proper accounting has to be kept to ensure that overtime rates are properly paid. Failure to do so can result in litigation as well as penalties and interest on the unpaid back wages.

In California, nonexempt employees over the age of 18 and any minor employees not prohibited from working in the subject employment shall not be employed for more than eight hours in a workday or for more than forty hours in any workweek unless they are paid the appropriate overtime wages. For nonexempt employees any time beyond eight hours but less than twelve hours in any typical workday, that employee shall be paid at a rate one and one-half times their normal rate of pay. For any work performed in excess of twelve hours in a day that employee shall be paid at a rate equal to double the regular rate of pay. These rules are also typically true for all states within the United States.

There numerous exceptions to the overtime rule though. The main exception is for executive employees. Executive employees are defined as;

  • Whose duties and responsibilities involve the management of the enterprise in which he or she is employed or of a customarily recognized department or subdivision thereof; and
  • Who customarily and regularly directs the work of two or more other employees therein; and
  • Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and
  • Who customarily and regularly exercises discretion and independent judgment; and
  • Who is primarily engaged in duties, which meet the test of the exemption;
  • An executive employee must also earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.

As an executive employee, that particular employee is not entitled to overtime wages. However, in order to meet the criteria of a managerial employee, one must be more than merely a supervisor of two or more employees. The managerial exempt employee must be in charge of the unit, not simply participate in the management of the unit.

There are other exceptions that may apply to your business, however, many are state specific and it is highly recommended that you speak with an attorney familiar with the employment laws of your particular state to stay informed of other exemptions to overtime laws.

One of the most misunderstood areas of payment of overtime laws by employers is whether overtime must be paid to salaried employees. The short answer is yes, depending on whether that employee is exempt or not. Obviously, executive employees that meet the above mentioned requirements are exempt from overtime laws whether they are paid hourly, commissions or salary or some combination thereof. Professional employees are usually exempt as well, i.e., in house attorneys and accountants. All employees, whether hourly or salary, must be paid overtime wages if they are not exempt and work over eight hours a day or forty hours per week.

This is usually where I see the most litigation as an attorney. Most companies realize that hourly employees that work in the warehouse should be paid overtime. Where most companies do not even realize that overtime needs to be paid is in regards to the salaried employees in the company’s offices. Usually what occurs is that a salaried employee is terminated and seeks legal counsel in regards to the termination. As part of the intake process the terminated employee learns that he/she should have been paid overtime but was not. This usually results in a complaint being filed with the labor board administrative court or with a civil court of law.

If a salaried employee needs to be paid overtime the most difficult question for most employers is how to calculate those overtime hours. If you are paid a salary, the regular rate is determined as follows:

  1. Multiply the monthly remuneration by 12 (months) to get the annual salary.
  2. Divide the annual salary by 52 (weeks) to get the weekly salary.
  3. Divide the weekly salary by the number of legal maximum regular hours (40) to get the regular hourly rate.

In California, if the employee was not paid overtime correctly, according to Labor Code section 203, “the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefore is commenced; but the wages shall not continue for more than 30 days.” Thus, not only would the employer be liable for the back wages, but also an additional month of salary after the employee is no longer employed as a penalty against the employer. Obviously, this can be quite costly for the employer.

What if an employee decides that he or she should not be paid overtime wages? Perhaps, the employer is a small family run company and one of the employees decides that as a matter of sacrifice to keep their job and to help the employer during tough economic times, they will waive their rights to overtime wages. In California, even if they do so in writing, that does not mean that later that same employee, when terminated, cannot come back and make an overtime claim against the employer. An employee cannot waive their rights to overtime or even minimum wage.

It is imperative that employers understand wage and overtime laws so that they may protect themselves from post termination or lay off claims. Ignorance of the law or a lack of intent is not a defense to wage claims nor is it a defense that the employee volunteered and agreed to waive their rights to overtime. Improperly paying your employees is a ticking time bomb waiting to explode in regards to your employment issues. There have been numerous class action lawsuits filed against large institutional employers for failing to classify employee correctly. In tough economic times the instances of employment litigation usually increases as employees are laid off or terminated. Again, it is recommended that before an employee is terminated or laid off that all employers seek the advice and counsel of an experienced attorney in employment law.

The Hiring Process

http://www.xbiz.com/articles/108476/fattorosi

In my last article, we discussed the potential legal problems with terminating or laying-off employees. However, one of the best ways to prevent legal pitfalls is to screen and hire your employees well. Often termination issues can be resolved in the screening process.

Too often, employers do not avail themselves of the recommendations made by former employers. One of the best tools to determine whether a candidate would be a good fit for your organization is to ask that candidate’s former employer.

However, you do have to be careful in the types of questions that are asked. You can certainly ask if the former employer would recommend your candidate for the position they have applied for. You may also ask the former employer to describe the candidate’s skills in regards to the employment relationship. You may also confirm length of employment.

What you do not want to ask are questions about the candidate’s personal life, family, sexual orientation, health, issues with worker’s compensation claims or benefits, issues with any possible prior litigation against the former employer, as well as any information pertaining to the candidate’s religious, political or social views.

If you deny a candidate employment and that candidate does instigate a discrimination lawsuit, the less information you have in regards to the their personal life, health issues, as well as their views and prior history unrelated to their ability to perform the essential functions of the position offered the better for your defense of the matter. Now this is not to say, that you cannot look at your candidate and make a determination that they would not be a “good fit” within your organization. Obviously, personality can sometimes be more important that skills, depending on the job, for example, a sales position or even a receptionist’s position.

I do recommend that you do some basic background research as to your candidate though. If your candidate is in their twenties or thirties in age, it is more than likely that they may have a Myspace page. That page may be very telling as to that candidate’s personality. You can find out what music they listen to, what their favorite books are, what their favorite television shows are. You can also see who they are friends with in your organization and may even be able to read some of their blog posts.

Certainly, Myspace will not give you all the information as to someone personality. It can be a mirror into their lives. Obviously, this seems to contradict my previous comments on what you should know about your potential candidate. The difference is that you should not be asking a previous employer for potentially private information about a candidate, however, if that candidate has openly disclosed this information for the world to see on their Myspace page that is a completely different situation.

Obviously, an employer cannot discriminate in regards to the hiring of a potential candidate based upon a protected class such as race, national origin, religion, shade of skin color, age, sex, sexual orientation, pregnancy status, medical disability and or sometimes even English language skills according to case law interpreting Title VII (Civil Rights Act of 1964).

Questions pertaining to any of these protected classes would be highly improper during the interview process. As an employer interviewing a candidate you want to avoid question about religious holidays, what country they or their ancestors are from, how old the candidate is and whether they have any medical disabilities. And as difficult as it maybe, if your candidate does volunteer information about such topics, that information cannot be used to deny a position to them.

You would also be well advised to stay away from any questions dealing with drug use or drug dependency. Preemployment drug testing is still an emerging issue in the law. Even cities such as San Francisco have passed ordinances barring drug testing of certain employees or for certain reasons.

Therefore, it is highly recommended that before you decide to insert a pre-employment drug screening into you hiring process that you consult with a local attorney that is well versed in employment law. Asking someone to reveal their medical history as a condition to seeking employment is legally risky for the employer. Remember that your candidate may have to reveal their use of a doctor’s proscribed medication that could show up in their test results, thus revealing an underlying serious medical condition.

It certainly appears that an employer’s hands are cuffed when it comes to screening potential candidates. Realistically, that is certainly true when it comes into investigating more than their abilities to perform the job duties of the position they are applying for.

However, it is certainly recommended that you carefully review their resume for inconsistencies. Perhaps there is a gap in their resume where they did not appear to work for several years. Obviously you can inquire as to that issue. They may not have listed references. As stated earlier, you should talk to every reference listed. If for some reason your candidate did not list their last employer as a reference you can inquire as to why they were not listed as a reference.

It is also highly recommended that you require some sort of writing sample from your candidates in your employment advertisement. A writing sample can speak volumes about a potential candidate. You may also give the candidate several tests during the interview, i.e., typing tests, mathematical tests, spelling and grammar tests, as long as those tests will have a direct correlation to the job duties they will be performing. Further, those tests will have to be administered to each person interviewed.

Dealing With Your “Former”

http://www.xbiz.com/articles/106291/fattorosi

One of the most hotly litigated areas of law in hard economic times is employment law, and more specifically, the termination of employees. Often, based on the pure realities of the situation, companies must downsize in order to remain competitive. However, in order not to fall into a situation that could result in potential litigation with a terminated employee, basic employment laws and regulations must be adhered to.

Before one can discuss the termination of an employee, it is first important to define what an employee is. In California, Labor Code Section 3357 controls the issue of whether someone is an employee. However, this is a rebuttable presumption, and the actual determination of whether a worker is an employee or independent contractor depends on a number of factors.

In short the “economic realities” test adopted by the California Supreme Court in the case of S. G. Borello & Sons Inc. vs. Department of Industrial Relations (1989) 48 Cal.3d 341 has set forth the factors used to determined whether an one is an employee or an independent contractor. In regard to the economic realities test, the most significant factor to be considered is whether the person to whom service is rendered has control or the right to control the worker both as to the work done and the manner and means in which it is performed. If not, then the person may be considered an independent contractor.

Assuming that the person terminated is an employee, it is important to keep in mind that California is an “at will” employment state. This basically means that anyone can be fired at any time for any lawful purpose, if there is no employment contract. However, no one can be terminated based upon a protected class — race, color, religion, national origin or sex as well as age and disability. Disability also includes pregnancy.

If an employee is to be terminated for cause — meaning that the termination is based on performance issues of that employee — and the employee fits into one of the protected class, it is imperative that the employer document the performance issues completely before any such termination. Often, verbal warnings are not sufficient, and it is necessary to document the employee’s performance or insubordination issues well in advance of the termination. Without such written warnings employers can find themselves in a defensive position attempting to explain why the employee’s termination was not a result of discriminatory termination practices.

If the employee is to be terminated without cause and his/her termination is due to the economic business realities of the company’s current financial situation, it is more difficult to document the need to lay off the employee. It is recommended that, if possible, layoffs be conducted in groups and not of single employees. If a layoff occurs in group fashion, it will be easier for the employer to justify the layoff of anyone who might be one of the protected classes.

Now that the employer has terminated or laid off the employee, is the relationship concluded? The simple answer usually is no; even if the employee has been terminated for cause, the employer still might have to defend a wage, hour or overtime claim in front of the Division of Labor Standards and Enforcement. The former employee also might file a claim for unemployment insurance benefits.

How this next step proceeds usually depends on why the employee was terminated, how the employee was terminated and whether during the employment the employer properly classified and compensated the employee.

If the employee was terminated without cause and was laid off, they would be entitled to benefits through unemployment insurance. If the employee was terminated for cause, he or she still might file an unemployment claim; however, if the employer has documented the employee’s poor performance or insubordination, the claims can be challenged and often defeated in an administrative court.

If the employee was not properly paid for overtime, meal breaks or for their overall compensation, that employee can file a wage and/or overtime claim with the Labor Board or directly with a court of competent jurisdiction. If litigation does ensue, it often can be costly for the employer. Therefore, it also is imperative that employers keep accurate records and time slips during the employee’s term of employment. Again, as with any litigation, the most important aspect to remember is to document, document and document some more. Accurate time slips including break times are necessary to defend any claims of improper payment of wages.

A quick note about the classification of employees: Overtime at a rate of one and a half times their usual pay rate must be paid if an employee works more than eight hours per day, whether that employee reaches 40 hours per week or not. This is a recent change in the law. It use to be that overtime would not be due and owing to an employee until after that employee reached 40 hours worked in a calendar week. If an employee is a supervisor and has at least two other subordinate employees under their direct control, they can be classified as managers and not be paid overtime. Whether an employee is an hourly or salaried employee is immaterial to whether they need to be paid overtime.

It also is important to note that most states require that a terminated or laid-off employee be provided their last paycheck within a certain amount of hours and or days from the date of the separation. Therefore, it usually is advisable to provide the former employee with all wages due at the time of the actual notice of separation.

Obviously this article is not exhaustive as to the legal requirements involved with the termination and layoff of employees. Nor is it complete as to the classification of employees or payment of overtime wages. It is strongly recommended that any company seek the advice and counsel of both an attorney well-versed in employment law and a specialist in human resources.

Often, many of the problems with the termination of an employee can be solved in the hiring process. Knowing whom to hire and not hire often is the best defense against possible future claims and lawsuits. Choosing the right potential candidate(s) is a minefield that has to be navigated carefully. Just as with termination, discriminating against certain potential candidates can lead to claims of discrimination and potential litigation.

Who Owns Your Content?

http://www.xbiz.com/articles/19639/fattorosi

Copyright is an extremely broad subject that could literally require an entire textbook to fully discuss and debate, but taking stock and questioning the very ownership of your content library is crucial.

Work-for-hire agreements and how they affect your business — whether you contract for or shoot adult content for any media — is a major first step toward defining what you own and securing your future as a producer and purveyor of adult content.

Most studios, directors and cameramen truly believe that the person who pays for the content owns it. This is not necessarily true.

Works created as part of one’s job, referred to as “works for hire” are treated differently than those works created by independent authors and independent contractors. An employer is entitled to the fruits of his or her employees’ labor. Section 101 of the Copyright Act of 1976 defines a work made for hire as:

1) a work prepared by an employee within the scope of his or her employment; or a work specifically ordered or commissioned for use as a contribution to a collective work, as part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.

There are two ways to create a work made for hire. The first is through an employment relationship between the commissioning party and the creator of the work. For example, a studio hires a director-cameraman and editor and places that person on salary paid through a payroll by the studio with taxes being withheld and deducted from his or her pay. This is a typical employer-employee relationship, irrespective of the industry.

According to Section 201(b) of the Copyright Act: 1) [T]he employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised by the copyright.

From my experience, many studios hire directors, cameramen and editors as independent contractors and not payrolled employees. This can and will create a relationship that cannot be classified as an employer-employee, which then means that unless the studio has a signed work-for-hire agreement from all parties that had creative input into your scene or movie, they, not the studios, actually jointly own all the rights pertaining to that work. Further it should be noted that the director, cameraman and editor have merely granted the studio a nonexclusive license in the content, which can be rescinded and revoked at anytime by the joint copyright owners.

Independent Contractors
An independent contractor can be defined as a person who renders service in the course of an independent employment and who follows the employer’s desires only as to the results of the work, not as to the means whereby it is to be accomplished. Further, it is a common practice within the industry to claim that anyone on an adult production set is an independent contractor and not an employee. In an effort to save the studio on payroll taxes and the necessary workers compensation insurance, this is a common mistake that can have dire consequences when it comes to who owns the copyrights to the content that has been procured.

Without a work-for-hire agreement signed by the director-cameraman and editor, a studio will not own the content they have paid for. With every independent contractor agreement, a corresponding work for hire agreement must also be executed. Without a signed agreement, copyrights cannot be waived.

For years the debate as to whether a specific work was a “work made for hire” was a source of great confusion. However, in 1989 the U.S. Supreme Court resolved much of the confusion surrounding the issue of who was an “employee” and who was an “independent contractor.”

The court concluded that “common law agency principles” must be used to determine whether the work was prepared by an employee or an independent contractor. The court enumerated several factors in determining whether a hired party qualifies as an employee or is instead an independent contractor: (1) the hiring party’s right to control how the work was accomplished, (2) the skill required, (3) who provided the materials and tools, (4) where the work was performed, (5) length of relationship between the parties, (6) whether the hiring party could assign additional projects to the hired party, (7) extent of hired party’s discretion over when and how long to work, (8) method of payment, (9) who hired and paid assistants for the project, (10) whether the work was part of the hired party’s regular business, (11) whether the hiring party is in business, (12) did the hiring party pay employee benefits, and (13) the tax treatment of the hired party.

The Supreme Court also stated that these factors were not an exhaustive list. No single factor was determinative of whether a hired party would be considered an employee. The significance of this Supreme Court decision was its conclusion that the two prongs of the “work made for hire doctrine” were mutually exclusive. Furthermore this decision restricted the “work made for hire” doctrine under the first prong to “actual” employees while the second prong was held to be only applicable to independent contractors.

As an aside, it should be noted that the Copyright Act imposes two requirements to create a work-for-hire situation for specially commissioned works created by independent contractors that apply to the adult industry. The first relevant aspect is (1) a contribution to a collective work and (2) a part of a motion picture or other audiovisual work. Obviously these two do apply to the industry. Therefore, without a signed release that is unambiguous as to the agreement waiving copyright, the independent contractor retains all copyrights.

What does this mean for you? Well, if you are a director who owns his or her own production company and have shot content for numerous studios and have not signed a work-for-hire agreement, you may still own the copyrights to all that content and could revoke the studio’s rights to use, display and profit from your work.

A director who does not own his or her own production company but still has worked for several studios and has not signed a work-for- hire agreement, then you also still may own your work and have the studio’s rights rescinded accordingly. Further, you very well might be entitled to a share of the profits from the sale of your work.

Agreements Are Key
If you are a studio or a party that commissions adult content, use work-for-hire agreements liberally. If you have not used such an agreement in the past and have not paid those with creative input via a payroll with taxes deducted, you might not own the rights to the content that you are profiting from. Eventually, your studio may be forced to share those profits with the director-cameraman and editor and/or be forced to stop distributing the content in question.

Basically anyone who has creative input into the final product could have a copyright interest in it. Therefore, work-for-hire agreements should be invoked liberally when attempting to decide who to provide one of these contracts or forms to.

It is better to have too many potential independent contractors execute them rather than make a mistake as to who may or may not have creative input into your content.

More specifically, the following guidelines should be followed to help you obtain and retain copyright ownership of creative works that are intended to qualify as a “work made for hire.”

1. Have a written contract between you (the studio) and any independent contractors who may be “hired” (directors, photographers, videographers, editors etc.).

2. Have a written “work made for hire” agreement with all freelancers and independent contractors who create works that you want to qualify as a work made for hire.

Merely stating that this is a “work made for hire” agreement does not make it one; all the requirements of the independent contractor prong must be satisfied.

3. Make sure the written work-made-for-hire agreement is signed by both parties before the creation of the work.

4. Include an appropriate “assignment” clause in the work-made-for-hire agreement that will serve as a backup if the work does not qualify as a “work made for hire.”

It is strongly recommended that you contact an attorney familiar with copyright law and work-for-hire agreements to further discuss the issues raised by this article in regards to your business or rights.

This article is not exhaustive on this particular issue, and there may be conflicting laws and standards depending on what geographical region in which you operate your business.